Homer Alaska - Business

A U.S. Marine and owner of halibut quota summed it up best in his comments to the North Pacific Fishery Management Council about the ongoing allocation fight among commercial and charter sectors.

"This isn't the Iraq war," wrote Dustin Connor, "but it sure has gone on longer."

Indeed, it has been 19 years since the council formed its first charter workgroup to address the emerging conflicts between the historically commercial fishery and the burgeoning recreational sector.

Nearly two decades later, the issue remains unresolved and the council has come to the conclusion that years of efforts to get halibut management off its table has been ill-conceived in hindsight.

So now  rather than trying to keep halibut battles off its agenda through the catch sharing plan it passed in 2008  the council unanimously adopted a motion April 2 introduced by Ed Dersham of Anchorage that would instead create an annual process to choose charter management rules.

The council motion passed April 2 also contains provisions for upward revisions in charter allocations based on the differences between harvest estimates from the statewide harvest survey and logbook data.

Further, it contains options that would greatly increase charter allocations from the now discarded management "matrix" at the current low levels of abundance, by giving the charter sector an additional 3.5 percent of the harvest.

The logbook adjustments, and the options for reallocating 3.5 percent to the charter sector in times of low abundance, would drastically alter the harvest split from the catch sharing plan, or CSP, passed in 2008.

Running the adjusted allocation percentages against the commercial and charter harvests from 2008 to 2012 shows that a total of 2.65 million pounds allocated to the commercial sector under CSP would have been shifted to the charter sector.

Adding in the options for an extra 3.5 percent at low abundance along with the logbook adjustment moves another 2 million pounds from commercial to charter, for a total of about 4.65 million pounds if the proposed allocations and options were in place from 2008 to 2012.

At current dock prices, 4.65 million pounds is worth about $28 million; and with shares of quota selling for $30 per pound and up, the value of that proposed shift to shareholders is $140 million or more.

The commercial fleet agreed to the logbook-adjusted allocations during the North Pacific council's Advisory Panel discussion as a compromise to move the CSP forward, and it had unanimous support. In fact, the 2.65 million pound shift from commercial to charter from 2008 to 2012 under Dersham's proposal is almost identical to the amount that would have been shifted from charter to commercial under the catch sharing plan.

But the extra 3.5 percent allocation proposed by Dersham is a "double dip" by the charter fleet that longliners "can't live with," said Linda Behnken of Alaska Longline Fishermen's Association.

Behnken pointed to the council analysis that showed Southeast quota holders have seen their share values plummet as harvest have been cut by 80 percent from 2006 to 2012.

In one example, 25,000 shares worth 3,563 pounds of halibut in 2003 are now worth only 978 pounds; in another, shares purchased in 2008 are now worth less than half their original value. That means fishermen who have used their homes, boats and permits as collateral are now under water on their loan payments.

Connor, the Marine who testified to the council in support of the CSP while on leave from Iraq in 2008, has a sister Tori, who also purchased halibut quota and wrote to the council that she is working at McDonald's to help make her loan payment.

"If the charter fleet is complaining about making ends meet," Tori Connor wrote to the council, "there are plenty of jobs here at McDonald's."

The loss in quota share value has been less for central Gulf of Alaska longliners, but the 17 percent cut in 2012 versus 2011 is pushing them under water, too, according to United Cook Inlet Drift Association Executive Director Roland Maw.

Maw's organization of drift fleet salmon fishermen also has members with halibut quota share holdings totaling about 2 million pounds, and he told the council that the harvest cuts have finally put them in the same place as their Southeast counterparts with loans now under water.

After years of increases to as high as $6.77 per pound at the docks, there is also now downward pressure on prices as consumers and restaurants are balking at high halibut prices, further eroding commercial fishermen's holdings.

In the face of the economic analysis showing the impacts of harvest cuts on the commercial fleet, the council moving to favor the charter sector with additional allocation was a political decision, Behnken said.

"It's fair to say that all the proposed revisions on the table work in one direction," Behnken said. "They all go one way. The charter sector has nothing to lose at this point. The revisions on the table are all shifting quota in one direction."

While generally happy the "matrix" of management measures has been dropped in favor of an annual process, charter operators have a different take on the allocative aspects of the council action.

Rex Murphy of Homer said the proposed percentages, even with the logbook adjustments or under the options, don't track closely enough with the current guideline harvest level, or GHL.

"They're moving in the right direction in 2C (Southeast)," he said. "It's really close if you do the logbook adjustments. They've got some work to do in 3A (central Gulf)."

In particular, Murphy noted the drops in allocation in the central Gulf to charter when certain harvest thresholds are crossed, most notably at 20 million pounds combined between commercial and charter.

At 19.99 million pounds of combined harvest, the charter sector would receive about 3.3 million pounds, but at 20 million pounds the charter sector would receive 2.8 million pounds. Murphy noted that such an allocation doesn't really float with abundance as intended, because the allocation drops when the harvest rises.

Splitting the harvest as a percentage under the CSP compared to the tiered "stair steps" of the GHL has been one of the biggest issues charter operators have with the proposed program. Using the percentage splits generally results in lower allocations to charter compared to the GHL, especially at the current low abundance of halibut.

The CSP contained a variety of default charter management measures for allocation percentages, bag limits and size limits at varying levels of abundance. Charter operators argued the matrix was too inflexible, and that the rules and allocations called for at the current low levels of abundance would put them out of business.

For instance, had the CSP been in place for 2011, Southcentral anglers would have had their allocation cut by more than 1 million pounds from the prior year and been restricted to one fish per day compared to the previous two.

The Southeast sector would have received an allocation of about 250,000 pounds less than 2010 and some level of size restriction would have likely also been imposed.

Using the logbook adjusted percentages proposed by Dersham in 2012 also would have resulted in charter allocations below the GHL. In Southeast, charter would have received 650,000 pounds compared to their GHL of 931,000 pounds.

In Southcentral, charter would have received 2.4 million pounds compared to the GHL of 3.1 million pounds. Murphy said charter operators wouldn't accept allocation percentages that far off the current GHL.

Had those percentages under Dersham's proposal been in place for 2012, some sort of harvest restriction would have been required in both Southeast and the central Gulf and under the proposed annual process the charter sector would have to suggest management rules to keep itself within the allocation.

Known as the "2012 model," the process for annual charter management is so dubbed based on the work of the Charter Halibut Implementation Committee to replace the 37-inch size limit imposed on Southeast anglers in 2011 with a "reverse slot limit" in 2012. The "reverse slot limit" allowed for retention of one fish per day up to 45 inches, or one longer than 68 inches. The measure allowed charter operators to once again market trophy fish opportunity.

The 37-inch size limit was recommended by the International Pacific Halibut Commission in 2011, and accepted by U.S. Secretary of Commerce Gary Locke, because the council had not suggested anything beyond a one-fish bag limit to hold the Southeast charter sector within its allocation.

The Southeast sector went over its guideline harvest level, or GHL, allocation by a cumulative 3.7 million pounds from 2004 to 2010, while the commercial harvest on the Panhandle was absorbing quota cuts of more than 60 percent over the same period.

The 2011 size limit held the Southeast charter sector to about half of its allocation of 788,000 pounds and operators protested they wouldn't be able to handle another year under the rule. That led the council to recommend the charter sector's proposed change to the IPHC, which approved it at the annual meeting in January.